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How to invest in the US
Funds and ETFs to invest in the US from Citywire Selection and wealth managers.
US shares are expensive compared to equities in other regions, like Europe, but should still form part of a well-diversified long-term portfolio, wealth managers say.
See our full article here on the outlook for US shares, which should be read in conjunction with this article.
Many investors in the region prefer to get exposure through ‘passive investments’, in the belief that active fund managers have consistently failed to beat the index in the tough US market.
Reflecting that view, Citywire’s second tip for the US is iShares S&P 500 , an exchange traded fund (ETF).
‘You can put together what is essentially an active portfolio without having to purchase active managers,’ says Noland Carter, chief investment officer at wealth management firm Heartwood, who agrees that active fund managers do not add value in the US.
Noland says his firm seeks ‘sectors, themes and styles’. In their balanced portfolios Heartwood invests in the iShares S&P 500 recommended by Citywire Selection, as well as:
- Vanguard Large-Cap ETF
- Vanguard Mega-Cap Value ETF
- iShares U.S Regional Banks ETF
- iShares North American Tech ETF
In more aggressive portfolios, Heartwood also recommend the iShares Russell 2000 and iShares Russell Micro-Cap ETFs.
Simon Brett, chief investment officer at Parmenion, which provides investment services for financial advisers disagrees with the assumption that active fund managers do not add value in the US market. ‘It’s a very large stock market. There are lots of companies out there doing lots of interesting things,’ he says.
More about this:
Look up the funds
- Smith & Williamson North American Trust
- Baillie Gifford American C Acc
- AXA Framlington American Growth R Acc
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